Sharechat Logo

NZ dollar rises, shrugging off US-China trade war woes

Monday 11th November 2019

Text too small?

The New Zealand dollar rose, shaking off concerns that the US may not lift tariffs on Chinese imports as much as hoped and as the market jockeys for position ahead of the Reserve Bank's monetary policy statement on Wednesday.

The kiwi was trading at 63.45 US cents at 5pm in Wellington from 63.19 cents at 8am while the trade-weighted index was at 70.06 points from 69.88.

Mike Shirley, a dealer at Kiwibank, says the market traded a 30-point range through most of the day and gradually retraced its losses in New York on Friday when conflicting statements about tariff removal were flying in the context of an expected preliminary trade deal between the US and China.

Global markets had been buoyed last Thursday when a Chinese official said Beijing and Washington had agreed to lift existing tariffs but then US President Donald Trump said he hadn't agreed to lift tariffs on Chinese goods.

Given the length of the trade war – it has been waged hot and cold and back again since early last year, "it's almost like some terrible comedy," Shirley says.

Markets were subdued with the US bond market closed tonight for the US Veteran's Day holiday.

The RBNZ's monetary policy committee will meet on Wednesday to decide what to do with the official cash rate.

According to a Bloomberg survey, 15 out of 21 economists are predicting the bank will cut the OCR to 0.75 percent from 1 percent currently while the other six are expecting no change.

"As we draw closer to the RBNZ decision, we're likely to see positioning flows. It still feels very much like a line-ball call with a mild skew to a cut," Shirley says.

The market had priced in about a 65 percent chance of a cut early this morning and that has ebbed to just above 60 percent now.

The New Zealand dollar was trading at 92.56 Australian cents from 92.05, at 49.61 British pence from 49.40, at 57.56 euro cents from 57.32, at 69.19 Japanese yen from 69, and at 4.4413 Chinese yuan from 4.4209.

The two-year swap rate edged up to a bid price of 1.0550 percent from 1.0490 percent on Friday while 10-year swaps rose to 1.5325 percent from 1.5250 percent.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Heartland announces FY20 full year results
Geo Limited releases its FY20 Annual Report
Michael Hill International Limited announces 2020 annual report
Tower supports climate risk reporting
Tourism Holdings Limited Updated FY20 guidance
The Bankers Investment Trust Plc- Issue of Equity
Oio Consents to Acquisition of Metlifecare
Summerset Considers Retail Bond Offer
Z seeks previous corporate employees for remediation payment
SkyCity Announces Full Year Results

IRG See IRG research reports